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Wednesday, January 03, 2024 9:51:19 AM
By: Christopher Lewis | January 3, 2024
• Silver fell in the early hours on Wednesday to show a continuation of somewhat dire momentum to kick off the new year. That being said, there are plenty of support levels underneath.
Silver Markets Technical Analysis
During the session on Wednesday, silver fell to reach the crucial 200 day EMA. This is a rather ugly candlestick, but having said that, we are still very much in the middle of a lot of consolidation. Furthermore, we have to worry about ISM numbers, the jobs report, and a whole host of other things, not the least of which would be traders coming back into the markets and liquidity being all over the place during the next several sessions. Because of this, I don’t necessarily think silver is going to break down, but it is worth noting that we have had several negative days in a row.
Silver is going to behave a little bit differently than the gold market will, mainly due to the fact that it is also considered to be an industrial metal. If we are in fact going to see some type of slowdown out there, then demand for silver will probably drop. As things stand right now, I think there is a lot of support at the $22 level, maybe some minor support at the $23 level, so both of those are areas I would be paying close attention to for any type of bounce.
If we were to break down below $22, that opens up a move down to $21. On the upside, if we can take out the $24 level and go higher than that area, then the silver market could find itself reaching towards the $26 level eventually, which is the most recent high. It’s a sloppy and noisy range-bound type of market we are in, but that’s just the nature of silver to begin with.
Silver is an extremely volatile contract, so therefore you need to use a position size that makes sense when you don’t really know what the next thing to move silver is going to be. This is especially true during the first week of January when a lot of traders are just putting positions back on and there isn’t a whole lot to go off of as far as economic information.
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